PRIME MINISTER OF THE GOVERNMENT No.

131-2007-QD-TTg

SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom Happiness

Hanoi, 9 August 2007

DECISION ISSUING REGULATIONS ON HIRING FOREIGN CONSULTANTS IN CONSTRUCTION ACTIVITIES IN VIETNAM

The Prime Minister Pursuant to the Law on Organization of the Government dated 25 December 2001; Pursuant to the Law on Construction dated 26 November 2003; Having considered the proposal of the Minister of Construction:

Decides: Article 1 To issue with this Decision the Regulations on hiring foreign consultants in construction activities in Vietnam. Article 2 This Decision shall be of full force and effect fifteen (15) days after the date of its publication in the Official Gazette. Any previous provisions contrary to the Regulations issued with this Decision are hereby repealed. Article 3 Ministers, heads of ministerial equivalent bodies, heads of Government bodies, chairmen of people's committees of provinces and cities under central authority, and organizations and individuals concerned shall be responsible for implementation of this Decision.

Prime Minister of the Government NGUYEN TAN DUNG

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PRIME MINISTER OF THE GOVERNMENT

SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom Happiness

REGULATIONS ON HIRING FOREIGN CONSULTANTS IN CONSTRUCTION ACTIVITIES IN VIETNAM

(Issued with Decision 131-2007-QD-TTg of the Prime Minister of the Government dated 9 August 2007)

Article 1 1.

Applicable subjects and governing scope

These Regulations govern the hiring of foreign organizations and individuals to provide consultancy services in construction activities in Vietnam, comprising formulation of construction master plans, construction surveys, formulation of investment projects for construction of works, design of construction works, management of construction, supervision of execution of works, selection of contractors in construction activities, and a number of other construction consultancy services consistent with the law of Vietnam. Where an international treaty to which the Socialist Republic of Vietnam is a party or signatory contains provisions on use of construction consultancy services which are different from these Regulations, the provisions of such international treaty shall apply. Principles on hiring foreign consultants

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Article 2 1.

Depending on the requisite quality of the construction consultancy services product, the investor of the investment project for the construction of works [or] the body organizing formulation of a construction master plan shall propose the hiring of a foreign consultant to provide construction consultancy services when considered necessary. The hiring of foreign consultants to provide construction consultancy services must ensure the principles of competitiveness, cost efficiency and effectiveness. Foreign consultants may not be hired to provide construction consultancy services relating to State secrets; [but] if this is necessary, there must be permission from the competent authority. Foreign consultants must satisfy the conditions on capability appropriate to the scope and items of services for which they are hired. The hiring of foreign consultants must comply with the provisions of these Regulations and the relevant laws of Vietnam.

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Article 3 1.

Authority to make a decision to hire foreign consultants

The person making the investment decision shall make a decision on hiring, and the form of hiring, foreign consultants to provide construction consultancy services relating to such investment project for construction of works. The chairman of a people's committee of a province or city under central authority shall make a decision on hiring, and the form of hiring, foreign consultants to formulate a construction master plan for areas within such province or city. The Minister of Construction shall make a decision on hiring, and the form of hiring, foreign consultants to formulate any construction master plan within the approval authority of the Prime Minister of the Government. The hiring of foreign consultants must be stipulated in the investment decision in the case of an investment project for construction of works, and in the decision approving formulation of construction of the master plan in the case of a master planning project. Forms of hiring foreign consultants

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Article 4

There shall be two forms of hiring foreign consultants: hiring an expert and hiring an organization. 1. Hiring an expert means the form of hiring a foreign individual to provide construction consultancy services at the request of the investor or of the body organizing formulation of the construction master plan. Hiring an organization means the form of hiring a foreign consultancy contractor or hiring a partnership between a foreign consultancy contractor and a domestic consultancy contractor to provide construction consultancy services at the request of the investor or of the body organizing formulation of the construction master plan. Conditions on capability of foreign consultants

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Article 5 1.

Foreign consultants must provide evidence of their legal entity status and professional capability when they participate in selection for provision of construction consultancy services in Vietnam. Tender invitation documents for the selection of foreign consultants must, in addition to satisfying the requirements on capability conditions stipulated by the law of Vietnam, contain the following specific additional requirements on capability of the consultant expert or organization: (a) The expert to be hired must have a construction consultancy practising certificate; and must have a minimum of five years experience practising as a construction consultant and must have participated in a minimum of three finalized construction consultancy services [projects] of the same type as the work for which an expert is to be hired. The organization to be hired must have registered its operation, must have legal entity status, adequate financial capability, an adequate number of quality experts, and must have completed a minimum of three construction consultancy services [projects] of the same type as the consultancy services [project] for which an organization is to be hired as the main contractor.

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(b)

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Article 6 1.

Method of selection of foreign consultants

The selection of foreign consultants must comply with the current law of Vietnam on tendering and with the provisions of these Regulations. If a master planning project includes a requirement to hold a competition to design a project plan, then such competition must be held prior to selection of a foreign consultant. The person authorized to approve the master planning project shall make a decision on the form and contents of the competition. If during the process of selection of a foreign consultant a number of foreign consultancy organizations and individuals all satisfy the requisite conditions on capability, then preference shall be given to selecting the foreign consultancy organization or individual who undertakes to provide training to raise the standard of the domestic consultants jointly participating in providing the construction consultancy services. Management of cost of hiring foreign consultants

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Article 7 1.

A determination of the cost of hiring foreign consultants to provide construction consultancy services must be consistent with the ability of the hirer to pay and must ensure that the cost price of the product is reasonable. These costs shall be used within the scope of the total investment costs of the project. The cost of hiring foreign consultants shall be determined in accordance with the estimated number of consulting hours per month (international practice) or as a percentage (%). The estimated budget for hiring foreign consultants shall be total estimated costs for completion of the construction consultancy services to be hired, and shall comprise expert fees and all other related costs including any taxes payable under current regulations. (a) Expert fees shall be determined on the basis of the number of experts, the number of working hours of each expert at the basic salary rate and expenses at the basic salary rate for experts such as social [insurance] costs, management fees, profit, allowances and insurance costs. The number of experts and the number of working hours of each expert shall be determined on the basis of the volume of work required, the required schedule, the standard of expertise and the ability of each expert to accept to undertake work. The basic salary rate for experts and expenses calculated on the basic salary rate for experts shall be based on the audited operational and financial results of the consultancy organization or on the salary rate of the expert in contracts hiring such expert and performed in the three most recent years. Other expenses shall include the experts travelling expenses, the working office expenses, expenses of [attending] conferences and seminars, and other expenses (if any). [Expenses being] taxes payable shall be determined in accordance with the current law of Vietnam.

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(b)

(c)

The Minister of Construction shall provide guidelines on determination of the cost of hiring foreign consultants in accordance with the provisions in these Regulations.

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3.

In a case where a foreign contractor is appointed, the investor shall organize formulation and evaluation of the cost of hiring foreign consultants in order to submit same for approval to the person making the investment decision (or to the person delegated with authority to make the investment decision in the case of a project within the decision-making authority of the Prime Minister). The people's committee of a province or city under central authority shall approve the cost of hiring foreign consultants to formulate a construction master plan for areas within such province or city. The body organizing formulation of a construction master plan shall approve the cost of hiring foreign consultants to formulate any construction master plan within the approval authority of the Prime Minister of the Government. The investor of an investment project for construction of works or a body organizing formulation of a construction master plan may hire a consultancy organization with adequate capability to evaluate the total estimated budget of hiring foreign consultants before such budget is approved. Management of a contract hiring a foreign consultant

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Article 8 1.

The hiring of a foreign consultant must be implemented via a contract signed by the foreign contractor with the investor of the investment project for construction of works or with the body organizing formulation of the construction master plan. The contents of a contract hiring a foreign consultant must comply with the law of Vietnam and must specify the number of experts and their requisite quality in addition to basic items stipulating the scope of work, the time for performance and the completed product. In the case of a foreign consultancy contractor in partnership with a domestic consultancy contractor, or in the case of a foreign consultancy contractor using a domestic consultancy contractor as a subcontractor, then the contract hiring the foreign consultant must contain, in addition to the [above] stipulated items, a division of the scope and volume of work and the costs of implementing same as between the partners or as between the main contractor and sub-contractor. The investor of the investment project for construction of works or the body organizing formulation of the construction master plan shall be responsible to supervise consistency between the clauses and provisions in the contract hiring the foreign consultant with the actual status of use of the expert, with the actual work arrangements, with the actual hours worked by experts, and with the amount, schedule and quality of the completed services product to provide the basis for testing and acceptance, and for payment pursuant to such contract. The price of a contract hiring a foreign consultant and the conditions in the contract shall provide the basis for making payment to the foreign consultancy contractor by the investor of the investment project for construction of works or by the body organizing formulation of the construction master plan. Payment of the costs of hiring a foreign consultant must comply with current regulations and the specific conditions in the contract hiring the foreign consultant. Management of foreign consultancy contractors

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Article 9 1.

Foreign consultancy contractors must, after being selected to provide construction consultancy services in the territory of Vietnam, comply with the provisions of article 7.4 of the Law on Construction and with Decision 87-2004-QD-TTg of the Prime Minister of the Government dated 19 May 2004 issuing Regulations on Management of Operations of Foreign Contractors in the Construction Sector in Vietnam.
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2.

Foreign consultancy contractors must, while providing construction consultancy services relating to construction standards and criteria, comply with the law of Vietnam on use of construction standards and criteria. If foreign consultancy contractors use foreign construction standards and criteria then they must comply with current regulations. Foreign consultancy contractors shall not be permitted to purchase or sell contracts in any form. If during supervision of performance of a contract any foreign consultancy contractor is found to be in breach of its contractual undertakings or to have purchased or sold a contract, such contractor shall be dealt with in accordance with current regulations. Implementing provisions

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Article 10 1.

The Ministry of Construction shall guide resolution of any difficulties during implementation of these Regulations. Annually, ministries, ministerial equivalent bodies, Government bodies and people's committees of provinces and cities under central authority shall report to the Ministry of Construction on the status of implementation of these Regulations in order for such Ministry to provider an overall report to the Prime Minister of the Government. Prime Minister of the Government NGUYEN TAN DUNG

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